Australia is to expand its diplomatic presence in Papua New Guinea by setting up a consulate-general's office in Lae.
In a statement the Australian government says Lae, as PNG's commercial capital, is integral to Australia's US$13.7 billion investment in the country.
Australia also provides PNG with US$393 million dollars in annual aid support.
It said the consulate-general will boost Australia's presence and bolster the growing trade and investment relationship.
The announcement came during the annual Australia-PNG Ministerial Forum in Canberra.